The Center for Political Accountability (CPA) and 17 activist investors have called on S&P 500 firms to improve their disclosure of corporate political spending before the 2012 proxy season-or face possible shareholder resolutions on this topic. "We are particularly concerned by heightened pressures companies face to support candidates, groups, and causes whose positions and activities could threaten corporate reputation, bottom line, and shareholder value. We are also concerned about the risks posed by the rise of secretive third party groups as conduits for political spending," Bruce Freed, president of CPA, wrote in an open letter to 423 large-cap companies. Freed's letter urges the 423 companies to join the other large-cap firms that "have demonstrated leadership by disclosing the details of their spending and implementing board oversight of political spending made with corporate funds." Washington-based CPA has spearheaded shareholder-resolution campaigns for more than six years. The group, together with the Wharton School's Zicklin Center for Business Ethics Research, also plans to release a new index on Oct. 28 that rates firms on the quality of their disclosure. During the first half of this year, shareholder proposals calling for reports on political spending and policies averaged 32.5 percent support at 32 companies, up from 30.2 percent in 2010, according to ISS data. (This average doesn't include other resolutions that sought shareholder votes on spending or reports on "grassroots lobbying" activities). Support for these proposals has increased significantly since 2005, when they typically received between 7 and 10 percent approval.
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